Mobile & Cloud Gaming to Push Video Games Market to Over $200B by 2023

Sep 15, 2020

A new report from Juniper Research found that the video games industry will exceed $200 billion in value in 2023, growing from an expected $155 billion in 2020.

Mobile and cloud gaming will lead this growth, as the market shifts further towards recurring revenue, and purchase revenue declines by 5% over that period.

The new research notes that the popularity of F2P (free-to-play) games like Fortnite and Call of Duty Mobile is intensifying the move to in-game monetisation. The report shows that cloud gaming and other video game subscriptions will grow at an average rate of 9% per year; bringing in over $8 billion of revenue in 2023. However, this will not immediately compensate for declining purchase revenue.

‘At current gaming subscription prices, it will take an average of ten months of a subscription payment to cover the retail cost of a single AAA game,’ remarked research co-author James Moar. ‘The value of these platforms lies in keeping players within an ecosystem; ensuring that revenue across multiple games is captured by a single platform.’

F2P Games Changing the Landscape

Thanks to gamers signing up to subscription services like EA Access, Google Stadia and Xbox Gamepass and buying fewer standalone games, only mobile games will see a net increase in games installs between 2020 and 2023. However, 99% of mobile game downloads in the next three years will be F2P. We anticipate less than 50% of PC game installs over that period to be paid for, due to a combination of game giveaways and F2P business models.

PC games will be the most lucrative segment for in-game purchases; approaching $32 billion in 2023. While mobile games will have more purchases, higher value game expansion purchases will keep PC in-game revenue growth strong. Smartphone in-app revenue will grow at an average of 8% over the forecast period, as smartphone gaming in emerging markets grows.

Source: THE FAST MODE